This is processing fee. You pay them to consider your application, not for the result. So yea you pay even if refused. Same for every visa for every country.
No one has ever told you that you can stay a year. You can stay 180+180 by extending. If you need the whole year, just visa run on day 180 and visa run on day 360
I read somewhere someone who did it without canceling the ED visa and didn’t make any problem and when they entered, immigration officer asked what visa they wanted to use.